Pork Industry Call for Help May Take Time to Decide

The U.S. pork industry’s latest call for federal aid to prop up producers nearing bankruptcy may take a month or two to decide, Deputy Agriculture Undersecretary Michael Scuse said today at a House Agriculture subcommittee hearing in Washington, DC

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The U.S. pork industry’s latest call for federal aid to prop up producers nearing bankruptcy may take a month or two to decide, Deputy Agriculture Undersecretary Michael Scuse said today at a House Agriculture subcommittee hearing in Washington, DC.

The National Pork Producers Council (NPPC) wants the government to buy at least $50 million of pork products for federal food assistance programs and take other measures to save an industry that is floundering from losses of $23/head in the last two years, which amounts to total losses of more than $5.3 billion since September 2007.

“To stop producer foreclosures and bankruptcies and for us to continue providing consumers around the globe with the safest, most nutritious meat protein, we need to find a way out of this two-year-old crisis,” testified NPPC President Don Butler.

Moreover, NPPC cited data from the Chicago Mercantile Exchange indicating that losses for the rest of the year could reach $30/head. Based on lean hog futures, the group also expects the cost of production to exceed cash hog prices in all but four months in 2010.

USDA spent $164.6 million to buy 100 million pounds of pork during fiscal year 2009, ending on Sept. 30, for donation to food banks. That doubled the total for fiscal year 2008 and included $30 million in additional surplus removal purchases this fiscal year, Scuse said.

USDA said that up to $250 million is available in Section 32 funds, raised by customs receipts, to help unsubsidized farm products including pork.

NPPC’s Butler said the crisis was caused by a surge in production costs due mainly to higher feed costs and compounded by export bans on U.S. pork products by countries pointing to H1N1 influenza concerns.